Sime Darby Property anticipates that property demand will moderate in the first quarter of next year, assuming that the Home Ownership Campaign (HOC) concludes on December 31, 2021, with no further extension.

However, its group managing director Datuk Azmir Merican believes that the market will gradually improve in the coming quarters.

“The HOC has been very helpful…(but) there is no HOC next year. Over the long term, we remain optimistic for Sime Darby Property. We have new industrial products that are quite healthy, and we know that demand for landed homes will continue to be strong. We need to gauge the market as we launch and plan integrated products to arrive at the right places in our township at the right price,” he explained.

Sime Darby Property plans to launch 1,856 units in the fourth quarter of 2021 (Q4 2021), with a gross development value (GDV) of RM1.6 billion.

The majority of the units, or 57.8 per cent, are landed residential units worth RM921 million, followed by industrial products at 25.8 per cent (worth RM411 million) and high-rise residential at 13.9 per cent (worth RM222 million).

For the fiscal year 2021, the total value of launches is RM3.9 billion.

With the planned launches, Azmir expects the company’s overall property sales to exceed RM2.4 billion in the current fiscal year.

Sime Darby Property, according to him, has achieved RM1.9 billion, or 80 per cent of its sales target.

Azmir said that the company anticipates a surge in transactions before the HOC expires next month, coupled with the current low-interest-rate environment.

“We are very positive of exceeding the sales target and having the digital capabilities in executing sales online. I think consumers find it easy to transact for our products that they know and understand,” he said earlier today during a virtual media briefing following the release of the company’s third-quarter results for the fiscal year ended September 30, 2021 (3Q FY21).

Sime Darby Property’s revenue for the third quarter of the fiscal year 2021 fell 34.49 per cent to RM388.24 million from RM592.63 million the previous year, as the various Movement Control Orders impacted its property development and sales progress.

Despite lower revenue in the current quarter, its net loss shrank sharply to RM15.8 million from RM359.97 million a year ago, owing to lower losses from its joint ventures.

The company returned to profitability in the nine months ended September 30, 2021, with a net profit of RM64.72 million, compared to a net loss of RM450.24 million the previous year.

Sime Darby Property also revealed that its financial position remains strong, with a cash balance of RM618.9 million and an average net gearing ratio of 32.1 percent as of the third quarter of fiscal year 21.

The company has increased its future revenue visibility, supported by unbilled sales of RM2.1 billion to date, which have surpassed the RM2 billion mark for the first time since 2018.

Azmir said that as the economy and property market regains momentum, Sime Darby Property’s strategies will allow it to generate positive financial and operational results for the full fiscal year.

Sime Darby Property, he said, is focused on achieving its corporate priorities for the fiscal year 2021, which include diversifying its recurring income.

For its long-term real estate strategy, the company is capitalising on the demand for large-scale, modern logistics properties in prime locations, as well as a new partnership with LOGOS Property Group.

Source: NewStraitsTimes, Kathy B./November 26, 2021

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